Information Technology and the Sales Function

ABSTRACT - This research considers the impact of technology on the salesperson’s activities. The study integrates a literature survey with quantitative research to uncover the relationship between the usage of technology and the alignment of salespeople’s time within the HR services industry. A survey of 50 HR sales consultants was conducted and it was found that these salespeople do save time by using mobile technologies, but channel their additional time into selling activities instead of building stronger relationships with existing customers. Discussion addresses the possible reasons for salespeople not redirecting their time toward customer relationship marketing, as it was postulated they would.

Citation:

Peter Allan Reday and Na WoonBong (2005) ,"Information Technology and the Sales Function", in AP - Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 57-63.

Asia Pacific Advances in Consumer Research Volume 6, 2005      Pages 57-63

INFORMATION TECHNOLOGY AND THE SALES FUNCTION

Peter Allan Reday, Ashland University, U.S.A.

Na WoonBong, Kyunghee University, South Korea

ABSTRACT -

This research considers the impact of technology on the salesperson’s activities. The study integrates a literature survey with quantitative research to uncover the relationship between the usage of technology and the alignment of salespeople’s time within the HR services industry. A survey of 50 HR sales consultants was conducted and it was found that these salespeople do save time by using mobile technologies, but channel their additional time into selling activities instead of building stronger relationships with existing customers. Discussion addresses the possible reasons for salespeople not redirecting their time toward customer relationship marketing, as it was postulated they would.

TECHNOLOGY AND EFFICIENCY

Hardware

Many companies have been providing their staff with information technology (IT) as it becomes available based on the assumption that it will lead to an increase in productivity and other long run benefits for the company. Various studies of IT and performance/productivity have been conducted, but most of these studies seem to be more concerned with the effects of IT on productivity at the industry/economy level. The findings from these studies are often contradictory in any case, and have led to the discussion of the "IT productivity paradox." This paradox was formulated by Nobel laureate Robert Solow in response to the massive investments in IT that started began in 1980 yet seemed to have limited positive effects on productivity growth (Solow 1987). However, it was also argued that many of these studies suffered from methodological flaws in that they do not regard differences between firms or industries.

Limited academic research has been devoted to the study of the effect of technology on salespeople’s performance. However, early case studies have shown the potential benefits of technology for salespeople (Cronin and Davenport 1990; Moriarty and Swartz 1989). Still, little insight has been provided as to whether the use of technology can add value. The objective of this research is to examine the usage of IT among salespeople. More specifically, an endeavor is made to find out whether higher usage of technology results in a "better" alignment of time spent on the various activities in which salespeople are involved.

Hammer and Champy claimed that the real power of technology is not that it can make the old processes work better but that it enables organizations to break old rules and create new ways of working (Hammer and Champy 1993). This is evident in the role that the salesperson plays, which seems to have changed over the years as salespeople are no longer simply promoting their goods and services to the consumers on a transactional basis in a bid to increase sales. Many salespeople have evolved from transactional selling to become managers of customer relationships, and technology has played a part in this transition by facilitating buyer-seller interactions, building stronger customer relationships and allowing easier access to critical sales information. Technology is thus increasing the efficiency and effectiveness of salespeople through their ability to improve communications between the salespeople, the selling organization and the customers (Taylor 1993).

Changes in communication-related technology was the strongest new trend reported in a salespeople’s focus group study conducted by Marshall, Moncrief and Lassk (1999). Communication technologies such as email and cellular phones have been found to be useful communication tools that increase salespeople’s productivity and aid in the provision of higher levels of customer service (Marshall et al. 1999). In addition, e-mail allows messages to be sent almost instantaneously to any number of recipients. E-mails have the additional advantage of being able to send personalized messages to customers. Even fax programs, such as WinFax, enables HR sales personnel to bypass the traditional fax machines, hence saving time.

The Internet is proving to be a powerful and low-cost way to communicate with customers. The key to staying competitive is to provide timely and detailed information to consumers, and Internet access has become widely used with almost every company having its own website for consumers or other stakeholders to gain access to updated information about the company and the products. One of the most popular sales uses of the internet is in generating prospects. Salespeople are becoming increasingly cyber-savvy to make contacts and subtly promote their products online (Success 1996). Also, distributing customer support information through the internet is a cost-efficient and time-saving way of delivering information to thousands of current and prospective customers (Taylor 1994).

Handheld device technology is rapidly becoming the standard equipment for many mobile workers and for executives who are frequently away from their desks. Many companies encourage their employees to make use of PDAs because they are believed to be able to boost productivity away from the office (Lewis 2002). It has also been suggested that wireless applications may even make business more proactive. The access to real-time data by remote service staff and the instant information on parts, inventory, and order status available to the salespeople will significantly improve service quality and reduce the transaction times (Xu, Yen, Lin, and Chou 2002). With more places providing wireless networking infrastructure, mobile technology such as PDAs and WAP-enabled mobile phones are gaining popularity as they can support anytime/anywhere access via networking.

As technology advances rapidly, companies have provided technological equipment to their staff in order to stay competitive. As a result, desktop computers and laptops and other forms of IT hardware have become fundamental tools in almost every company. Personal computers have enabled the sales force to provide high quality customer service by having quick access to timely and updated information (Futrell 2001).

Anderson argued that notebook computers equipped with various Sales Force Automation software applications have helped to reduce much of the paper work, helped to manage accounts, and helped to control sales administration tasks (Anderson 1996). Early in the last decade, laptop computers were shown to have the potential to deliver substantial benefits (Moncreif, Charles W. Lamb, and Mackay 1991). Later, laptop computers were reported to empower salespeople by allowing them to quickly and easily access their companies’ computer databases instead of going through their sales managers or any other headquarters’ sources (Seideman 1994). Hence mobile computing is generally seen as a valuable tool for increasing the level of productivity and a competitive weapon for organizations

TABLE 1

SUMMARY OF THE ACTIVITIES AND THEIR COMPOSITION

Software

For a salesperson, maximizing time for daily accomplishments is essential for consistent sales performance. Time management software enables the sales person to spend more time in front of the 'right’ customers, plan his presentation and utilize non-selling time in a more productive way. This improvement of time management directly increases productivity. Contact management is a listing of all the customer contacts. Contact management software such as the electronic address book enables the salesperson to retrieve this information easily in a variety of formats. Customers can be categorized into groups and assigned to salespersons, so that salespersons can perform tasks such as prioritize, schedule follow-up actions and update information easily.

Microsoft PowerPoint is one of the most commonly used presentation software packages which allows sales personnel to create dramatic and interactive computer based presentations at relatively low cost. As the old adage of "A picture is worth a thousand words" seems to still be true today, computer graphics can be very effective in creating an impact and capturing the attention of the clients during presentations.

Alignment of Salespeople’s Time

A preliminary research project concerning the alignment of salespeople’s time revealed that their time is mainly spent as follows (1996; O’Connell and Keenan 1990): Selling activities (56%), which is divided between face-to-face selling (31%) and selling via telephone (25%). Traveling/waiting time accounts for the second highest time usage (18%). Next is administration (15%) and account service/coordination (11%). These classifications of activities are rather broad, however, and provide little detail. In an earlier study reported by Moncrief (1986), 121 sales activities were identified. These activities are classified under ten headings shown in Table 1.

Several selling activitiesBproduct testing, installation supervision, accessory ordering, recruiting and training new sales rep and traveling with them did not show up in a later study (Duncan and Moriarty 1998), resulting in the elimination of one of the factors; "training and recruiting." Furthermore, in their 1998 study, 49 new selling activities were identified in addition to the 121 selling activities uncovered in the previous 1985 studyBand of the 49 new selling activities that were identified, 25 of them were technology-related (Marshall et al. 1999).

HYPOTHESES DEVELOPMENT

Technology is believed to make the selling process more efficient by automating highly repetitive support tasks, reduce the time salespeople spend on non-selling tasks and thus give salespeople more time to sell (Moriarty and Swartz 1989). IT should generally ease and speed the sales persons’ information and communication processes and their performance. Therefore, IT-savvy sales people will have the ability to build stronger customer relationships, provide better customer service and enhance their productivity (Colombo 1994; Duncan and Moriarty 1998; Keillor, Bashaw, and Pettijohn 1997).

Even though the number of activities identified as required for successful performance of the sales task has generally increased (Marshall et al. 1999), the use of appropriate technology should still improve salespeople’s productivity, freeing time from mundane and repetitive tasks and allowing more time for selling. This is presumably because salespeople who use technological tools will spend less time on administrative tasks and are thus able to spend more time on selling, providing customer service and developing customer relationships. Hence the related research hypotheses follow:

H1: The use of mobile technology decreases the proportion of time spent on administrative activities.

H2: The use of technology increases the proportion of time spent on selling.

H3: The use of technology increases the proportion of time spent on providing after-sales service.

H4: The use of technology increases the proportion of time spent on developing customer relationships.

It has also been suggested that mobile computing devices, telecommunication software and internet access are enabling salespeople to become virtually self-sufficient, thereby eliminating the need to travel (Anderson 1996). Therefore, we predict that as salespeople make more use of the available technology, they will spend less time on traveling.

H5: There is a negative relationship between the level of technology usage and time spent on traveling

RESEARCH METHOD

Sample and Data Collection

The nature of selling activities differs among industries leading to differences in the time allocated to various activities performed by salespeople in these different industries. The sample frame consisted of 50 respondents from the human resource industry only. In this light, our focus is on the salespeople within that industry (i.e. the HR consultants who are selling HR services). The objective of focusing on a single industry is to isolate the effects that inter-industry differences would have on the time allocated to various activities. The relative usage level of technology by the respondent is used to enable classification into hi-tech and lo-tech groups.

The survey was conducted through in-office interviews, using a convenience sample of respondents from various head-hunting firms in Singapore. Face-to-face in-office interviews ensure a lower non-response rate, and facilitate clarification of survey questions.

Questionnaire Development

Questions one and two of the survey probe into the kinds of IT that HR personnel use. Specifically, question one examines the types of hardware used, whereas question two relates to the types of software programs used. Question three uses a seven-point Likert scale to assess the perceptions that HR personnel have on the relationship between technology and time management, as it was thought that attitudes might play a role in technology usage.

In order to obtain a more specific proportion of time spent on each activity, respondents were asked to distribute a scale of 100% in accordance to the relative time they spend doing each item on the list of activities given to them. This constant sum scale was chosen for the ease of completion and understanding by respondents.

The generation of the list of activities for the respondents was based largely on the findings of the research of Marshall, Moncrief et al. (1999), although these activities have been reclassified to suit the nature of the human resource industry. Activities that are not relevant in this industry, such as "Working with Distributors," are thus omitted. It is difficult to draw a distinct line between the product and the client in the services industry; therefore, "Servicing the Account" and "Servicing the Candidate (Product)" are combined and renamed as "After-Sales Service." The terminology of some of the activity-groupings have also been changed, to ease respondents’ understanding. The list of activity classifications, as well as their activity composition, is shown in Table 2. Order taking and order processing, and information processing and management are considered as administrative activities, as stated in hypothesis H1.

A pretest of the procedures and the instrument was conducted with ten HR consultants from the target group, after which several minor adjustments to the questionnaire were made. For instance, the constant-sum scale was changed from 100-hours to 100 percent, because the pretest group expressed difficulty in allocating in terms of a 100-hours scale.

RESEARCH FINDINGS

IT Tools that HR Consultants Use

Table 3 shows the percentages of HR consultants who use the various IT tools. The survey showed that desktop PCs, word processors, web browsers and communication software (e.g.: email clients) are the most popular technologies used by the HR consultants. It was also found that less than 50% of the respondents actually use mobile IT devices (e.g. cellular handphones, laptops, PDAs and WAP ’phones) on the job.

To facilitate the testing of the hypotheses, the respondents are first separated into two groups. Based on the survey data, users of WAP, PDAs or laptops are separated from non-users. From the former group (users of WAP, PDAs or laptops), those who use Time Management Software (TMS), Contact Management Software (CMS) or web browsers are selected. This final classification of the HR consultants in the sample, consists of 29 respondents classified as hi-tech users while the remaining 21 respondents fall under the low-tech users group.

Respondents’ Perceptions of Technology

This variable was, unfortunately, not very helpful, as there is an almost unanimous agreement that technology helps productivityBin retrospect the social acceptability bias should, perhaps have been avoided in the question framing. The 7-point scale mean (where "7"=agreement that technology the use of personal technology has enabled them to better manage and allocate their time) is 5.2, the mode 5, and only three respondents answered below the mid-point of the scale.

TABLE 2

CLASSIFICATION OF SELLING ACTIVITIES IN THE HUMAN RESOURCE SERVICES INDUSTRY

TABLE 3

PERCENTAGE OF HR CONSULTANTS WHO USE IT TOOLS

Percentage Time Spent on Various Sales Activities

The means, standard deviations and confidence intervals of the percentage time spent on the respective activities are tabulated and presented in Table 4.

An exploratory investigation of the relationships between time spend on the respective activities was undertaken using correlation analysis. Table 5 contains a summary of the correlations between the variables included in this study, which are sufficiently encouraging to encourage hypothesis testing. In particular, a strong negative correlation can be seen between selling and after-sales service, traveling time, administration and, oddly, customer relationship marketing activities.

Hypotheses testing

Hypothesis 1 states that the use of technology reduces the time spent on administrative activities. Analysis by ANOVA, where the dependent variable is time spent on selling and the independent is high- or low-technology usage, reveals an effect in the expected direction (Mean_(hi-tech)=13.5, Mean_(low-tech)=10.6; F=.88, p=.05). Using Cohen’s classification of effect size and Hay’s Omega squared (w²=.054) then this significant effect is on the cusp of being a small or medium effect (Cohen, 1977).

H₂ states that the use of technology increases the proportion of time spent on selling; this hypothesis can also be tested by ANOVA using the hi- and low technology categorizations as the independent variable and selling time as the dependent. Again, the hypothesis is supported (Mean_(hi-tech)=33.79, Mean_(low-tech)=24.42; F=3.94, p=.05). In this instance w2=0.056, another significant effect on the cusp of being small and medium-sized.

TABLE 4

DESCRIPTIVE STATISTICS FOR THE HIGH- AND LO-TECH GROUPS

TABLE 5

CORRELATION MATRIX SHOWING RELATIONSHIPS BETWEEN HR CONSULTANTS= TIME EXPENDITURES

Hypotheses 3, 4 and 5 pertain to the use of high-technology allowing more time to be spent on after-sales service, customer relationship management and less on traveling, but all three are not supported statistically.

DISCUSSION

Summary

The use of computer technology is becoming part of the life of HR consultants, as it is for salespeople other industries all over the World. Whether it takes the form of computer-based contact management, electronic mail or searching for information on the World Wide Web, all of the HR consultants in this study are using technology on the job in one way or another. In fact, the overall usage figures surprised, as they seem somewhat low. Unfortunately the data does not allow speculation as to whether this is an industry effect (maybe HR consultants feel reluctant to use the technology, preferring a face-to-face contact?) or a national one (the research was conducted in an Asian city and thus may not reflect Western levels of usage).

The results suggest a statistically significant negative correlation between percentage of HR consultants’ time spent on selling activities and time spent on after-sale service, time spent on traveling, time spent on developing and maintaining customer relationships and time spent on administrative activities. The results also suggest significant negative correlations between time spent on after-sale service and time spent on traveling, time spent on developing and maintaining customer relationships and time spent on administrative activities. In addition, a positive correlation between the time spent on attending conference and meetings and tie spent on traveling was found.

The study findings do not support the overall assertion that a salesperson spends the time freed up from repetitive tasks for developing and maintaining customer relationships. As expected, though, "hi-tech" HR consultants spend significantly less time on administrative activities than their "low-tech" counterparts, and this represents an important finding. The second major discovery here is that time freed up on administrative efficiency due to technical sophistication is spent mainly on more selling.

Implications for Theory

As in previous research with salespeople, it was found here that the average HR consultant spends the greatest proportion of his/her time selling. An average HR consultant also devotes more than 30% of his/her time to after-sales service and customer relationship development. In addition, a significant proportion of time is spent on information processing, information management, order taking and order processing. Only a small fraction of the HR consultants’ time is spent on traveling or attending conferences and meetings. Although it seems a truism, selling is, then, still the most important aspect of a salespersons’ job.

The literature had seems to suggest, though, that sales consultants are spending more time on customer relationship management and after-sale services activities. In this customer relationship marketing era, it is a little puzzling that the HR consultants surveyed are not spending more time on developing customer relationships and providing better service.

Two speculations are tempting. First, in the tough economic climate prevalent in Singapore a short-term sales view may be dominant. Again, it would be really interesting to find out if this is an industry or a national phenomenon; is lip-service only being paid to customer relationship marketing in tough times, or is this a only a local issue?

A further fascinating speculation concerns the interpretation of the nature of activities that constitute selling and customer relationship development. In a sense the two functions may be very hard to separate as CRM is not undertaken for any philanthropic reason, but simply to increase sales in the medium to long term. Not only might there be some real confusion here (certainly in the minds of the respondents, at least) about the real differences, but maybe what we are seeing here is merely a short-term, rather than a long-term, sales concept at work?

Managerial implications

The use of technology will eventually lead to a decrease in the proportion of time being spent on mundane tasks by salespeople whether it is deliberately sought or not. However, sales managers could take a proactive stance and push to advocate the use of technology among salespeople; maybe financial incentives could be used to this end, to subsidize the cost of personal technology purchases by sales personnel. Certainly, the company could provide relevant hardware and software and training to its (HR) sales personnel.

The freed-up time of HR consultants with the use of technology apparently does not necessary lead to more time being allocated to developing and maintaining customer relationships. The fact that time saving was not channeled to customer relationships maintenance and after sale services meant that there is a possibility that the HR consultants are not catching on to either the fact that productive time can be freed by technology, or that there is a general misunderstanding, or disagreement, about the value of building and maintaining a strong relationship with (certain) customers. There seems an opportunity for companies to first of all establish their priorities, and then consciously direct the HR/sales personnel in the desired directionBeither a short-term sales orientation or to forgo one-time sales transactions and focus on building a long term relationship with the customers.

Future research

This is exploratory research that uses a local convenience sample and descriptive research methods. Clearly, confirmatory research on a larger scale, which could lead to wider generalizations, would be of great value. Furthermore, the use of a nominal scale to judge technical sophistication is crude; an equal-interview scale would not only allow more sophisticated statistical analysis but also allow the extent of adoption to be more accurately gauged.

Furthermore, the list of software and hardware which we consider in our study now are limited only to those basic off-the shelf products. With the introduction of 3G technology and Multimedia Messaging Service (MMS), a broader list of hardware and software can be developed. The list could also be extended to include customized software and Sales Force Automation (SFA) products on an organization level.

Nevertheless, a useful contribution has been made. That busy salespeople can save time on administration by using mobile technologies has been empirically demonstrated, and the options of spending that "found" time on short-term sales efforts or on longer customer relationship activities has been highlighted as an issue for sales managers to ponder.

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